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[casi] US and the changing face of Iraq

The US forces in Iraq have every intention of creating a country in their
own image - and that includes freezing out regional and local businessmen.

Aug 13, 2003

US and the changing face of Iraq

By Syed Saleem Shahzad

KARACHI - As the US-led Coalition Provisional Authority struggles to restart
business activity in Iraq, it is coming increasingly clear that as a matter
of policy, most of the beneficiaries will be US-led firms, while neighboring
Arab countries look as if they will be frozen out.

There is a strong belief in the Arab world that post-Saddam Iraq was
completely planned in Washington as a country free to be shaped under the US
administration, culturally, politically and economically. Indeed, the shape
of the new governmental infrastructure is a strong indication that
traditional influences, whether of the former Ba'athist regime or even from
opposition groups, will be kept at bay. Likewise, in the field of commerce,
the influence of neighboring countries will not be permitted. The new
dominant influences are free trade and representative democracy, which the
Americans clearly expect to be remarked upon in neighboring countries such
as Saudi Arabia, Kuwait and Syria.

The theme of the new Iraq is thus very clear. It would be another outpost of
US interests in the region, or certainly another US client state. The US
obviously does not trust local Iraqis who were bred and born under Saddam
Hussein. There is a feeling that the country was brainwashed with Ba'athist
theory. Ultimately more than 400,000 Iraqi civil servants have been sacked.

To replace the old system, the Pentagon has developed an organization of
Iraqi exiles from the United States and Europe under the rubric of the Iraqi
Reconstruction Development Council (IRDC). About 1,500 have returned to Iraq
and are assisting coalition authorities in running day-to-day affairs in the
ministries. They are helping the United States to develop a new system more
suited to Western and US political philosophy.

For example, Hazim Baker al-Suhail, previously in the Netherlands, came back
to Baghdad when the Saddam regime collapsed. He is an adviser to the IRDC
administration, working very closely with the United States on various

Speaking to Asia Times Online last Wednesday in Baghdad, Hazim Baker agreed
with the theory that US administration aims to block neighboring countries'
influence on commerce.

"This is true, that the US aims to promote its own companies' interests in
Iraq and wants to block the entry of neighboring countries in the rebuilding
process of Iraq," he said. "We see this development as positive, as all
Iraqi neighbors, including Iran, Jordan and Syria, are only interested in
safeguarding their personal interests in Iraq. Countries like Saudi Arabia
and Kuwait always promote their ideologies through their aid packages and
NGOs [non-governmental organizations]."

Obviously, this US attitude toward the region has its drawbacks. A Pakistani
independent businessman who is associated with US forces in the supply
network maintained that the prospects for clinching major business deals in
Iraq are clouded with uncertainty as Washington grapples with governing the
country without major regional influence.

"These notions have created bottlenecks in contract awards and subsequently
slowed down the process of reconstruction," the businessman observed.

As should probably be anticipated at this stage, most main business
activities concern contract awards to rebuild the country. As a long-term
priority, the northern Kurdish region is being given a priority by the
coalition authority. According to the chief executive officer of civilian
affairs of the 404th Battalion of the 101st Airborne Division, a team of
engineers arrived in Iraq about 10 days ago with plans to build an airport
in Sulemaniya as fast as possible. Once that is in place, northern Iraq is
expected to take a fairly good share of Iraqi business activity.

However, these developments apart, business activity is almost entirely
being planned by the coalition administration, led by L Paul Bremer. A new
legal framework has been developed that critics complain would utterly
discard any role in reconstruction by Arab countries and keep their
influence at bay.

At a time when deals for Iraqi business have just begun, the coalition
authority has begun to take steps that are a reflection of its bid to block
Middle Eastern economic influence. A contract to build a mobile telephony
system is the latest example.

Under the auspices of the US-led authority on July 31, a tender conference
was held in Amman for three Iraqi mobile-phone licenses, potentially among
the most lucrative contracts to be offered in Iraq to date. One each is to
be awarded for Iraq's northern, central and southern regions. However, rules
laid down in the tender documents clearly suggest that US authorities want
no role for any Arab countries.

According to the tender documents, "No government shall directly or
indirectly own more than 5 percent of any single bidding company or single
company in the consortia." That single sentence bars all Arab countries from
the contract, because all of the cellular-phone companies in the region are
at least partly owned by the governments of their respective countries.

That paves the way to boot out such companies as Kuwait MTC Vodafone, whose
roaming services also briefly worked in Baghdad and which was planning to
participate in the contract. The Kuwaiti government has 25 percent and thus
would have to say goodbye to Iraq.

Oil is a much more controversial issue. It is generally perceived that the
economic influx of the oil-rich Middle Eastern countries is a sword over the
head of the US occupation because it automatically brings in cultural and
political considerations that ultimately shot down the agenda of the
colonial powers in the region prior to World War II.

The US presence and its hand on Iraq's oil resources were already shocking
news for such countries as Saudi Arabia and Kuwait, which controlled the oil
markets during the period when Iraq was operating under sanctions.

News about the arrival of the first crude-oil shipment to the United States
from Iraq has jolted Riyadh and Kuwait City. At present, Iraq's daily oil
output is only 1.1 million barrels, far below the 2.8 million barrels per
day before the war. However, the regional governments believe that as time
passes, Iraq will increase production and simply break the Arab states' oil

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